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Aussie SEO startup Longtail secures $2.5 million as it embarks on international sales drive

Stephanie Palmer-Derrien /

Longtail

Longtail co-founders Andreas Dzumla and Will Santow. Source: Supplied.

Sydney SEO startup Longtail has raised $2.5 million from investors including Seek co-founder Andrew Bassat, as it gears up for significant growth in Australia, the UK and the US.

The funding comes from new and existing investors including Bassat and Sean Larcombe, managing director of Citigroup. According to Longtail, the investment values the startup at $25 million.

Founded six years ago by Will Santow and Andreas Dzumla, Longtail now has more than 50 customers on board, including Dan Murphy’s, Adore Beauty, Booktopia and Yellow Pages.

The Software-as-a-Service startup has two patents for its technology, one granted and one pending.

Longtail is designed to help businesses adapt their websites to align with the way people use Google search, Dzumla tells StartupSmart.

It makes websites more discoverable both through organic and paid search, while also helping users find the product they’re looking for by offering more relevant landing pages when they search.

Finally, the product helps Google to do its job, Dzumla says.

“While Google has amazing AI algorithms … it has to work with how websites are built,” he explains.

People often tend to search for complex combinations of four or five words, he adds.

“Websites are usually not built for that approach.”

The two co-founders met when Dzumla was working to improve SEO for Santow’s other business, Career FAQs.

Dzumla had been developing technology he thought could improve Career FAQs’ search engine results.

“I took that leap of faith with … an earlier version of Longtail,” Santow tells StartupSmart.

“My site traffic quadrupled,” he adds.

“We knew we had something special.”

In the early days, the money being generated off the back of the improved SEO traffic to Career FAQs was enough to fund Longtail, Santow explains.

“We were fortunate that we didn’t have to look for early seed capital,” he says.

For the first two years, the co-founders focused on developing the product and the technology, before turning their attention to securing clients.

Over the past three years, the startup has tripled its revenues year-on-year, Dzumla says.

“Our revenue is in the millions at this point,” Santow adds.

“By the end of next year, we’re looking at revenue circa $10 million plus.”

“Growth is going to come”

The latest funding will be used for accelerating Longtail’s growth, as the founders invest in building out their sales team in Australia, and building new teams in London and Seattle.

For the past 18 months, the startup has had just one salesperson in the business, Santow explains.

“We’ve got enough data to see what happens with one good, qualified sales person out there,” he says.

“Now we’re extrapolating those numbers for a broader sales force, we can see how the growth is going to come.”

The startup will also increase the headcount on its development team, Dzumla says, as it ramps up work on a new “strategic area” of the product — creating a self-service platform.

Currently, clients can see the back end, but Longtail manages it for them.

“We’re currently rolling out the front end so they can actually self-manage,” Dzumla explains.

“That’s also going to be very important for agencies.”

“In a bit of a bubble”

While they’ve got this far without a large sales team, both Santow and Dzumla say if they did it all again, they may not have taken the same approach.

Investing in staff is something “we probably should have looked to do earlier”, Santow says.

“When you’re in a bit of a bubble as a startup founder and you can see the performance the product is delivering, you assume everybody will want to buy it,” he explains.

“What we perhaps underestimated is that enterprise sales is a process like any other.”

It may have helped to have seasoned sales professionals who understand the nuances of creating, nurturing and converting the pipeline, he says.

Hiring someone to sell your product doesn’t mean that the founders don’t go to sales meeting, or that they stop selling altogether, Dzumla adds.

However, it can help to have someone who is “a bit more detached” from the product and the business.

“I’m so enthusiastic about the product, if someone doesn’t really understand the concept, or doesn’t want to buy right now, I’m like ‘why?’, I don’t get it,” Dzumla says.

“When you have someone with sales targets and sales objectives … it’s less emotional.”

That said, neither founder regrets the journey they have taken.

Although the co-founders didn’t invest in sales staff, “we used that time to invest in the product, and that has put us in great stead for the clients we’re onboarding now,” Santow says.

Also, waiting to bring on a sales team means they have been able to attract a higher calibre of professionals. Now, they have “really experienced people” joining from companies like Microsoft, Dzumla says.

“We wouldn’t have been able to attract that talent two or three years ago.”

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Stephanie Palmer-Derrien

Stephanie Palmer-Derrien is the editor at StartupSmart. You can contact her at [email protected].

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